diff --git a/packages/block/karma.conf.js b/packages/block/karma.conf.js
index 24677b6234..5ecd0e9d62 100644
--- a/packages/block/karma.conf.js
+++ b/packages/block/karma.conf.js
@@ -6,8 +6,9 @@ module.exports = function(config) {
     preprocessors: {
       './test-build/**/*.js': ['browserify'],
     },
+    concurrency: 1,
     reporters: ['dots'],
-    browsers: ['ChromeHeadless'],
+    browsers: ['FirefoxHeadless', 'ChromeHeadless'],
     singleRun: true,
   })
 }
diff --git a/packages/vm/lib/evm/opFns.ts b/packages/vm/lib/evm/opFns.ts
index d6b5df7b32..e460b0dc44 100644
--- a/packages/vm/lib/evm/opFns.ts
+++ b/packages/vm/lib/evm/opFns.ts
@@ -1,5 +1,12 @@
 import BN = require('bn.js')
-import { keccak256, setLengthRight, TWO_POW256, MAX_INTEGER, KECCAK256_NULL } from 'ethereumjs-util'
+import {
+  keccak256,
+  setLengthRight,
+  setLengthLeft,
+  TWO_POW256,
+  MAX_INTEGER,
+  KECCAK256_NULL,
+} from 'ethereumjs-util'
 import { ERROR, VmError } from '../exceptions'
 import { RunState } from './interpreter'
 
@@ -730,7 +737,7 @@ export const handlers: Map<number, OpHandler> = new Map([
 
       // TODO: Replace getContractStorage with EEI method
       const found = await getContractStorage(runState, runState.eei.getAddress(), keyBuf)
-      updateSstoreGas(runState, found, value)
+      updateSstoreGas(runState, found, setLengthLeftStorage(value))
       await runState.eei.storageStore(keyBuf, value)
     },
   ],
@@ -1287,12 +1294,14 @@ function jumpSubIsValid(runState: RunState, dest: number): boolean {
 }
 
 async function getContractStorage(runState: RunState, address: Buffer, key: Buffer) {
-  const current = await runState.stateManager.getContractStorage(address, key)
+  const current = setLengthLeftStorage(await runState.stateManager.getContractStorage(address, key))
   if (
     runState._common.hardfork() === 'constantinople' ||
     runState._common.gteHardfork('istanbul')
   ) {
-    const original = await runState.stateManager.getOriginalContractStorage(address, key)
+    const original = setLengthLeftStorage(
+      await runState.stateManager.getOriginalContractStorage(address, key),
+    )
     return { current, original }
   } else {
     return current
@@ -1436,3 +1445,18 @@ function writeCallOutput(runState: RunState, outOffset: BN, outLength: BN) {
     runState.memory.write(memOffset, dataLength, data)
   }
 }
+
+/**
+  setLengthLeftStorage
+  @param value: Buffer which we want to pad
+  This is just a proxy function to ethereumjs-util's setLengthLeft, except it returns a zero length buffer in case the buffer is full of zeros.
+*/
+
+function setLengthLeftStorage(value: Buffer) {
+  if (value.equals(Buffer.alloc(value.length, 0))) {
+    // return the empty buffer (the value is zero)
+    return Buffer.alloc(0)
+  } else {
+    return setLengthLeft(value, 32)
+  }
+}
diff --git a/packages/vm/lib/runTx.ts b/packages/vm/lib/runTx.ts
index 95de533742..009205770b 100644
--- a/packages/vm/lib/runTx.ts
+++ b/packages/vm/lib/runTx.ts
@@ -190,6 +190,7 @@ async function _runTx(this: VM, opts: RunTxOpts): Promise<RunTxResult> {
     }
   }
   await state.cleanupTouchedAccounts()
+  await state.clearOriginalStorageCache()
 
   /**
    * The `afterTx` event
diff --git a/packages/vm/lib/state/interface.ts b/packages/vm/lib/state/interface.ts
index 0a3bb694e6..0c423c63a8 100644
--- a/packages/vm/lib/state/interface.ts
+++ b/packages/vm/lib/state/interface.ts
@@ -31,4 +31,5 @@ export interface StateManager {
   accountIsEmpty(address: Buffer): Promise<boolean>
   accountExists(address: Buffer): Promise<boolean>
   cleanupTouchedAccounts(): Promise<void>
+  clearOriginalStorageCache(): void
 }
diff --git a/packages/vm/lib/state/stateManager.ts b/packages/vm/lib/state/stateManager.ts
index a7e340b8df..3e5d5db7b9 100644
--- a/packages/vm/lib/state/stateManager.ts
+++ b/packages/vm/lib/state/stateManager.ts
@@ -235,6 +235,14 @@ export default class DefaultStateManager implements StateManager {
     this._originalStorageCache = new Map()
   }
 
+  /**
+   * Clears the original storage cache. Refer to [[getOriginalContractStorage]]
+   * for more explanation. Alias of the internal _clearOriginalStorageCache
+   */
+  clearOriginalStorageCache(): void {
+    this._clearOriginalStorageCache()
+  }
+
   /**
    * Modifies the storage trie of an account.
    * @private
diff --git a/packages/vm/tests/api/runCall.js b/packages/vm/tests/api/runCall.js
index 436c8a425f..f9ad20e814 100644
--- a/packages/vm/tests/api/runCall.js
+++ b/packages/vm/tests/api/runCall.js
@@ -156,5 +156,52 @@ tape('Ensure that precompile activation creates non-empty accounts', async (t) =
     
     t.assert(diff.eq(new BN(expected)), "precompiles are activated")
 
+    t.end()
+})
+
+tape('Ensure that Istanbul sstoreCleanRefundEIP2200 gas is applied correctly', async (t) => {
+    // setup the accounts for this test
+    const caller =          Buffer.from('00000000000000000000000000000000000000ee', 'hex')                   // caller addres
+    const address =         Buffer.from('00000000000000000000000000000000000000ff', 'hex')
+    // setup the vm
+    const common = new Common({ chain: 'mainnet', hardfork: 'istanbul' })
+    const vm = new VM({ common: common})                               
+    const code = "61000260005561000160005500"
+    /*
+      idea: store the original value in the storage slot, except it is now a 1-length buffer instead of a 32-length buffer
+      code:             
+        PUSH2 0x0002
+        PUSH1 0x00
+        SSTORE              -> make storage slot 0 "dirty"
+        PUSH2 0x0001
+        PUSH1 0x00          
+        SSTORE              -> -> restore it to the original storage value (refund sstoreCleanRefundEIP2200)
+        STOP
+      gas cost: 
+        4x PUSH                                         12
+        2x SSTORE (slot is nonzero, so charge 5000): 10000
+        net                                          10012
+      gas refund 
+        sstoreCleanRefundEIP2200                      4200
+      gas used
+                                                     10012 - 4200 = 5812
+
+    */
+
+    await vm.stateManager.putContractCode(address, Buffer.from(code, 'hex'))  
+    await vm.stateManager.putContractStorage(address, Buffer.alloc(32, 0), Buffer.from(("00").repeat(31) + "01", 'hex'))
+
+    // setup the call arguments
+    let runCallArgs = {
+        caller: caller,                     // call address
+        to: address,
+        gasLimit: new BN(0xffffffffff),     // ensure we pass a lot of gas, so we do not run out of gas
+    }
+
+    const result = await vm.runCall(runCallArgs)
+    console.log(result.gasUsed, result.execResult.gasRefund)
+    t.equal(result.gasUsed.toNumber(), 5812, "gas used incorrect")
+    t.equal(result.execResult.gasRefund.toNumber(), 4200, "gas refund incorrect")
+
     t.end()
 })
\ No newline at end of file
diff --git a/packages/vm/tests/api/runTx.js b/packages/vm/tests/api/runTx.js
index 420820a0fc..c6db294b8c 100644
--- a/packages/vm/tests/api/runTx.js
+++ b/packages/vm/tests/api/runTx.js
@@ -5,6 +5,7 @@ const runTx = require('../../dist/runTx').default
 const { DefaultStateManager } = require('../../dist/state')
 const VM = require('../../dist/index').default
 const { createAccount } = require('./utils')
+const Common = require('@ethereumjs/common').default
 
 function setup(vm = null) {
   if (vm === null) {
@@ -111,6 +112,40 @@ tape('should fail when account balance overflows (create)', async (t) => {
   t.end()
 })
 
+tape('should clear storage cache after every transaction', async(t) => {
+  const vm = new VM({common: new Common({ chain: 'mainnet', hardfork: "istanbul" })})
+  const suite = setup(vm)
+  const privateKey = Buffer.from(
+    'e331b6d69882b4cb4ea581d88e0b604039a3de5967688d3dcffdd2270c0fd109',
+    'hex',
+  )
+  /* Code which is deployed here: 
+    PUSH1 01
+    PUSH1 00
+    SSTORE
+    INVALID
+  */
+  const code = "6001600055FE"
+  const address = Buffer.from("00000000000000000000000000000000000000ff", 'hex')
+  await vm.stateManager.putContractCode(Buffer.from(address, 'hex'), Buffer.from(code, 'hex'))
+  await vm.stateManager.putContractStorage(address, Buffer.from(("00").repeat(32), 'hex'), Buffer.from(("00").repeat(31) + "01", 'hex'))
+  const tx = new Transaction ({
+    nonce: '0x00',
+    gasPrice: 1,
+    gasLimit: 100000,
+    to: address,
+    chainId: 3,
+  })
+  tx.sign(privateKey)
+
+  await vm.stateManager.putAccount(tx.from, createAccount())
+
+  await vm.runTx({tx}) // this tx will fail, but we have to ensure that the cache is cleared
+
+  t.equal(vm.stateManager._originalStorageCache.size, 0, 'storage cache should be cleared')
+  t.end()
+})
+
 // The following test tries to verify that running a tx
 // would work, even when stateManager is not using a cache.
 // It fails at the moment, and has been therefore commented.